This is What a Rental Gone Bad Looks Like

[Ryan Daigle]

Public forums like these are often mostly filled with success stories. That makes sense – they're inherently more motivating and encouraging for people to get started. But most of us that have been around long enough will also have our fair share of misses, failures, and down years. I'd like to share mine...

This is a graph of the annual net income of one of my SFH rentals. If that looks like a lot of red... that's because it is! This one has been a real rough ride for the last year. Poor rehab followed by poor property management resulted in tenants that were being neglected and a property that had sewage backup into the house that went unaddressed for way too long.

I first learned about the situation over Thanksgiving break. Having third party property management is only helpful when they're good. Otherwise, it's just another layer you have to micro-manage and only add to the complexity.

Fast forward to today, after $3K in sewer repairs, and I have new property management in place and new tenants. But that graph exposes the truth, which is that it's been a lost year for that property. Between the cost of repairs, cost of tenant turns, and cost of PM transition, it's been a rough one.

Don't underestimate what it takes to do real estate right. It's not always an easy road to passive income.

What's your rental gone bad story?